N P R A B C D E G H K M Q S W Q1 This is like Vertigo case. There are four parts to this question. You are organizing a gala event. Tickets can be sold in advance and at the venue. You feel that if given away free, 1000 people will buy the advance ticket but no one will buy, beyond $40 per ticket. On the day of event you expect walk ins. Their demand is a function of price, p: 2000 - 60 p. The event hall will hold 600 persons. a) Find the optimal prices and tickets to sell b) Do you anticipate a problem with your solution? AdvanceDemand ='Q 1'!$C$15 ) How do you propose to fix the problem if any? AdvancePrice ='Q 1'!$B$15 10 d) How much will you pay for a venue that holds 2000 persons? AdvanceSales ='Q 1'!$D$15 11 TotalDemand ='Q 1'ISC$17 12 a) Sample layout - - please see solver also! You may have to edit a constraint! TotalRevenue ='Q 1'!$D$17 13 WalkInDemand =Q 1'!$C$16 14 Price Demand Revenue Formulae WalkInPrice 'Q 1'!$B$16 15 $ 1000.0 $ =1000-25*B15 WalkInSales 'Q 1'!$D$16 16 2000.0 $ =2000-60*B16 17 3000 $ 18 19 (b) Write your answer here 20 21 22 23 24 (c) Explain how you will fix the problem? Determine the new solution. 25 26 27 28 29 30 (d) How much more will you be prepared to pay to rent a bigger hall that can hold 2000 persons? 31 32 33 34 35 36 38 39 40 41 Q1 Q2 Q3 Q4 +A B C D E G H M N O P Q R S U V W 19 Revenue = $390.43 20 21 Answer the following questions 22 23 a) Daisy wants to optimize the prices but within a allowed range like +/- 10 cents. Determine the optimal price to maximize revenue. 24 Hint: I started off the optimization for you. You have to add the constraints on price! 25 26 27 b) Daisy wants to run a promotion on one product for $0.25. Which one? Explain briefly 28 29 30 ) Daisy wants to add a product to this assortment: Product name: Kitkat, Utility 3.0, price 2.75. Estimate the total sales and revenue. 31 Assume other prices remain at $2.20. Explain what you see as a consequence of adding a product to revenue, sales of other products. 32 33 34 35 36 37 Q1 Q2 Q3 Q4 +A B C D E G M N 0 P Q R S U V W X Z This question covers booking limits N You are selling tickets to a special musical event. You can sell as many advance ticket as you want for $50 per seat. Advance sale happens 2 weeks prior to the event and the sales window is open for one day. The open sales happen 24 hours prior to the event. The price for the open sales is $125. The open-sales demand is predicted to be Normal(45,10) (mean = 45, standard deviation = 10). 6 There are a total of 200 seats for the event. Answer all three parts. a) What question can you answer given this data? b) What is your answer? c) How does your answer change if the advance ticket sale has a Normal distribution with mean 165 and standard deviation 14? Please explain your answer briefly. 10 11 12 13 14 15 16 17 Q1 Q2 Q3 Q4 +A B C D E F G H K M N P Q R S T U V W X Z Explain the following concepts (max 10 lines each) JOUID 1. (15 points) Give three examples from the course on how to create price fence. 2. (15 points) Dynamic pricing - give at least three different examples from the course. Compare why they are same or different. Also explain the main decision in each case -- what are the considerations and how it can be done. 10 11 3. (15 points) Imagine an Opera theater that can sell tickets in advance which can not be refunded and also tickets that can be refunded. 12 The customers who purchase refundable tickets usually purchase late in the cycle -- that is close to the concert date. 13 The theater starts selling tickets two weeks to go to the concert. 14 Explain based on the revenue management principles, what 2 or 3 ideas can you apply to maximize revenue. 15 16 4. (15 points) Given a caselet be able to examine revenue potential by comparing with what is known and using the ideas 17 learnt in the course. 18 19 5. (15 points) Explain briefly whether we can recover utility and variance of utility from observed choice behavior? Give an example from the course. 20 21 22 23 24 Q1 Q2 Q3 Q4 +